Valuation Date and Alternate Valuation Date – Family Code 2552

A house, a business or an investment account is worth one amount at separation and a different amount years later at trial. Which value does the court use?

The default rule in California Code Family Code § 2552 is that the court values the assets and liabilities as near as practicable to the time of trial. The reason is fairness: if an asset has appreciated through nobody’s particular effort, both spouses share the gain, and if it has fallen in value, both share the loss.

The statute allows an exception. Upon thirty days’ notice to the other party, and for good cause shown, the court may value all or part of the assets and liabilities at a date after separation and before trial. The usual example is a business or professional practice whose value after separation reflects one spouse’s post-separation work; valuing it at separation prevents the other spouse from sharing in effort that is no longer community. The same logic applies to an asset one spouse has dissipated or neglected.

Because the choice of date can swing the division by a large amount, the party who wants an alternate date must ask for it in advance on a noticed motion. It is not a point to raise for the first time at trial.